Musk is “extremely interested” in Argentina’s vast lithium deposits, according to Milei. So too, apparently, is the US Government and many other US companies. Milei will happily oblige.
Argentina’s President Javier Milei has been in power for less than a month but he is already causing quite a stir. The omnibus bill his government has sent to the National Congress will, if passed, have major ramifications for the economy, politics and society. Workers’ rights will be pulverised; up to 41 state-owned companies, including the YPF oil company, will be privatised; the right to protest will be severely curtailed; taxes will increase, especially for the working and middle classes; public salaries, pensions and other benefits will be frozen as official annual inflation reaches 220%; and environmental laws and regulators will be put to the chainsaw.
This is austerity not on steroids but on angel dust. Rather than reverting Argentina’s decades-long economic malaise, it is likely to make it a whole lot worse.
The government says there is no money to maintain public spending while continuing to service the country’s odious debt, which was largely a legacy of the disastrous economic policies of the former Macri government (2015-19), one of whose architects, former JP Morgan Chase banker Luis Caputo, is now Milei’s economy minister. Meanwhile, there is still no mention of replacing the peso with the dollar, presumably because Argentina’s government has no dollars to speak of, or doing away with Argentina’s central bank, which were two of the main planks of Milei’s election campaign.
In total, the government proposes to reform, eliminate or add 664 legal articles. They include a proposal to empower the executive branch to “authorize the entry into the country of troops and equipment of foreign armed forces for the purpose of exercises, training or protocol activities” as well as the deployment of Argentine forces abroad. Until now, such movements have needed the approval of Congress. Just as recently happened in Peru and Ecuador, Argentina could be about to fling its doors open to US and other foreign military forces. Given Milei’s geopolitical affinities, those forces will presumably include NATO’s and Israel’s.
The omnibus bill, bearing the Orwellian title of “Law of Bases and Starting Points for the Freedom of Argentines,” comes a week after Milei passed the highly controversial Necessity and Urgency Decree, which came into force today (Jan 2, 2024). If the legislators in Congress approve the bill (still a big “IF” given how few MPs Milei’s Freedom Advances party has in the chamber), his government will be able to declare a public emergency in the economic, financial, fiscal, social, pension, security, defence, tariff, energy, health and social domains until at least December 31, 2025. Any declared emergency may be extended for a further two years, essentially covering Milei’s entire mandate.
Opening the Skies for Starlink
One potential beneficiary of the proposed reforms is the world’s richest man, Elon Musk, who has already rubbed shoulders with Milei on X, the social media platform formerly known as Twitter that Musk owns. Milei was one of the first guests on Tucker Carlson’s new show on X, which captured global attention with over 300 million screenings in 24 hours. Now, Milei wants to forge closer ties with the South African-born billionaire.
Musk’s satellite Internet service provider, Starlink, was the only private business Milei mentioned during his 15-minute speech announcing the reform program. From BA Times:
Among the 30 measures which the head of state announced by national broadcast was the de-regulation of satellite Internet services, in order to “allow for competition of foreign companies, such as Starlink,.”
Starlink is the satellite network run by tycoon Elon Musk, with whom Milei has a good relationship. Dys before the presidential inauguration, Milei acknowledged on social networks that he had had shared a “great conversation” with Musk.
Back then, Milei publicly thanked the businessman for his support on “X” (formerly Twitter, also owned by Musk): “I thanked him for defending the ideas of freedom and for supporting our work, especially taking into account all of which he represents as an icon for freedom worldwide.”
The head of state then dangled the possibility of a visit by Musk in 2024: “We stayed in touch for him to visit Argentina next year and to keep on bonding and working together.”
Argentina is one of surprisingly few countries in Latin America that haven’t signed on to Starlink’s services, the others being Venezuela, Bolivia, Paraguay, Uruguay, Guyana, Suriname Costa Rica, Nicaragua, Honduras, Belize and, of course, Cuba. In the map below (courtesy of Wikipedia), the countries in green have approved and activated the company’s services.
The Lithium Trail
The opening of Argentinean space to Starlink is not the only way Musk stands to benefit from Milei’s proposed reforms. In a televised interview last Saturday (Dec 24) Milei was barely able to suppress his excitement that Musk had called him personally. The billionaire had told Milei that he is “extremely interested” in the country’s lithium. So too, apparently, is the United States Government, and many US companies in the United States, but they all need a legal framework that respects property rights…
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Nick Corbishley 